Stomach this! Delhi is north India’s second-hottest farm state

Which is the hotbed of agricultural activity in India? Pause before you say Uttar Pradesh (UP), Haryana or Madhya Pradesh (MP). It’s Delhi, one of the biggest urban centres in the country.

‘Farmers’ in the national capital received more loans than their UP and Karnataka counterparts in 2009, according to information obtained from various government departments, banks and cooperatives.

This, when agricultural production around Delhi has virtually come to a halt due to urbanisation, whereas farming continues to be the core contributor to the economy in other traditionally agricultural northern states.

Delhi’s ‘farmers’ drew a whopping Rs22,077-crore agricultural loan in financial year 2009, says National Bank for Agriculture and Rural Development (Nabard).

The figure is the highest among northern states, barring Punjab, which bagged around Rs27,000-crore loan.

In comparison, farmers in MP and Haryana, two of country’s biggest agricultural states, got Rs13,430 crore and Rs14,915 crore, respectively. Even farmers in UP, the most populous state of the country, got only Rs21,100 crore.

Interestingly, Nabard data also indicates that much of the agricultural loans to Delhi ‘farmers’ were given by commercial banks, not cooperatives.

According to data on farm loan waivers by cooperatives, Delhiites claimed less than Rs5 crore under a Nabard scheme in 2008.
The trend brings to the fore the issue of rampant misuse of agricultural loans. Loans classified as ‘intended for agricultural purposes’ qualify for below-inflation interest rates and are often written off by the government. This might be one of the reasons such loans are growing at a break-neck speed.

According to Nabard, the country availed Rs3 lakh crore agricultural loan in the year ended March 2009, up from Rs2.55 crore the year before. Such loans have grown nearly five-fold in seven years and account for nearly Rs4.6 lakh crore advanced by commercial banks alone, according to Reserve Bank of India.

The biggest beneficiaries of agricultural loans, however, are the four southern states. These states accounted for more than 35% of the total loans disbursed in fiscal 2009.